A NATIONAL  INCOME  TAX. 


Under  the  Constitution  of  the  United  State 
there  ex'st  in  this  country  a national  governmeut  acc 
governn^ients  of  the  several  states  of  the  Union.  Fo 
the  support  of  these  two  kinds  of  government  ther 
exist  also  two  kinds  of  taxation  in  this  country,  na 
tion^l  and  state  taxation.  The  following  lines  wil 
trei^d  of  the  national  taxation  of  the  United  State 
that  comprises  at  present  import  duties  and  internal 
revenue  taxes. 

The  system  of  levying  duties  on  foreign  importet 
goods,  for  defraying  the  expenses  of  the  national  gov 
^ ernment — the  payment  of  the  interest  on  the  publi 
IP  debt  and  of  this  debt  itself  included, — is  as  old  i 
this  country,  as  the  government  under  the  Consti 
tution.  Yet,  such  import  duties  are  plainly  no 
correct  for  this  free  country.  They  unjustly  increas 
IcT  the  consumer  in  the  United  States  the  price  o 
iported  goods,  on  which  they  are  levied,  and  a 
the  price  of  domestic  commodities  o 
because  the  American  producer 
JJ,  as  ^ matter  of  course,  always  as 
3od8,  as  he  can  receive  fo 
therefore,  must  pa 
iuties  are  levie 
feiii^d^ia^pay  f 


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The  worst  kind  of  import  duties  are  those  levied 
ODder  a so-called  protective  tariff,  as  it  now  exists  in 
the  Uuited  States  The  object  of  such  a tariff  is,  at  the 
expense  of  the  rest  of  the  American  people,  finan- 
cially to  benefit  the  producers  or  manufacturers  of 
certain  domestic  commodities.  Those  men,  by  such 
a tariff,  shall  be  protected  against  foreign  competi- 
tition  in  this  country,  in  other  words,  against  low 
prices  of  their  goods. 

The  Declaration  of  Independence  of  the  United 
States  has  established  the  principle  of  equal  rights 
to  all,  before  the  law,  as  the  corner-stone  o£  American 
freedom.  Under  this  principle  Congress  has  no 
right,  by  a protective  tariff,  to  enrich,  at  the  expense 
of  their  fellow^citizens,  certain  producers  or  manufac- 
turers of  this  country.  Then,  the  Constitution  of 
the  United  States  says:  “The  Congress  shall  have 
power  to  lay  and  collect  taxes,  duties,  imposts,  and 
excises,  to  pay  the  debts  and  provide  for  the  common 
defence  and  general  welfare  of  the  United  States; 
but  all  duties,  imposts,  and  excises  shall  be  uniform 
throughout  the  United  States.”  This  clause  clearly 
shows,  that  the  establishment  of  a protective  tariff  is 
beyond  the  Constitutional  power  of  Congress,  which  • 
has  the  taxing  power  only  for  the  financial  support 
of  the  national  government  of  this  country, — en- 
abling it  to  defray  all  its  legitimate  expendituret,, — 
but  not  for  the  purpose  of  favoring  the  pecuniary  in- 
terests of  certain  classes  of  citizens  of  this  country. 
Under  the  Constitutional  clause  quoted,  such  special 
pecuniary  interests  cannot  be  considered  as  the  gen- 
eral welfare  of  this  country. 

American  mechanic  and  manufacturing  industry, 
by  the  good  qualities  and  cheap  prices  of  its  produc- 
tions, should  protect  itself,  both  at  home  and  abroad, 
against  the  competition  of  foreign  industry.  More- 
over,  self-respect,  energy,  and  economy  should  cause 
the  American  people,  financially,  industrially,  and 


3 

commercially  to  emancipate  themselves  from  Europe 
as  soon  and  as  completely  as  possible. 

For  defraying  the  expenditures  of  the  national 
government  of  the  United  States,  there  exist  also  in- 
ternal-revenue taxes  in  this  country,  being  levied  on 
the  following  articles  of  home  produciion:  DisUiled 
spirits,  fermented  liquors,  manufactured  tobacco,  and 
oleomargarine.  Wine,  produced  in  this  country,  is 
exempt  from  such  taxation.  As  these  taxes  affect,  as 
public  burdens,  exclusively  the  producers  and  con- 
sumers of  the  articles  stated  of  domestic  origin,  they 
plainly  violate  the  American  pririciple  of  equal  rights 
to  all,  before  the  law. 

Both  the  import  duties  and  the  internal-revenue 
taxes,  forming  the  two  principal  sources  of  the  rove 
nues  of  the  national  government  of  the  United  States, 
are  doubtless  erroneous  systems  of  taxation  for  this 
free  country.  As  to  the  internal-revenue  taxes  it 
may  be  said  yet,  that  neither  of  the  two  sorts  of  lux- 
uries taxed,— tobacco  and  alcoholic  beverages,  (dis- 
tilled spirits  and  fermented  liquors,'— srems  to  be 
worth  a high  price,  and  that  self-respect  and  common 
sense,  nothing  else,  should  cause  the  American  peo- 
ple to  abstain  from  an  improper  use  of  alcoholic  bev- 
erages of  every  kind  and  to  prove  a sober  nation. 

The  national  government  of  this  country  must, 
of  course,  be  supplied  by  the  American  people  with 
the  necessary  revenue,  to  perform  its  duties  under 
the  Constitution  and  the  laws  of  the  United  States, 
which,  duties  include  the  payment  of  the  interest  on 
the  public  debt  and  the  final  payment  of  this  debt 
itself.  The  Constitution,  therefore,  by  the  clause 
quoted  before,  gives  Congress  the  taxing  power,  for 
this  purpose.  Both  the  customs  system  acd  the  in- 
ternal-revenue system  being  wrong  and  unjust,  as 
shown  before,  another  kind  of  national  taxation  seems 
to  be  necessary  for  this  country.  Which  shall  it  be? 
The  Constitution,  by  the  provision  quoted,  entirely 
leaves  it  to  Congress,  to  determine  the  ways  and 


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means,  by  which  the  revenue  necessary  for  the  sup- 
port of  the  national  government  of  this  country  shall 
'be  raisfd  The  customs  and  internal-revenue  sys- 
tems, tnerefore,  may  be  completely  abolished.  In 
answer  to  the  question,  which  other  kind  of  national 
taxation,  in  their  stead,  shall  be  Rd^pted  by  the 
American  people,  the  following  suggestions  may  be 
ventured. 

It  seems,  that  the  most  correct,  natural,  and  log- 
ical national  tax  for  the^  American  people  is  one  re- 
lating to  the  net  annual  income  of  every  American 
citizen  and  resident  alien,  namely  an  annual  individ- 
ual inome-tax.  Such  a tax  would  be  in  full  har- 
mony with  the  Constitution,  as  quoted  before.  Under 
such  a system  of  taxation,  every  head  of  a family  or 
other  male  or  female  person  in  this  country,  having 
an  income  of  his  or  her  own,  should  by  law  be  bound, 
annually  to  pay  a certain  percentage  of  his  or  her  net 
income,  reaching  a certain  sum,  for  the  support  of  the 
national  government  of  this  country.  From  this  tax 
all  persons  should  be  exempt,  not  having  a net  an- 
nual income  of  a certain  amount,  Congress  might  see 
fit  to  fix  f r this  purpose,  perhaps  of  five  hundred 
dollars  or  of  any  other  small  or  moderate  sum.  All 
public  officers  of  the  legislative,  executive,  and  judic- 
ial branches  of  the  national  goverum^ent  of  the 
United  States  might,  as  to  their  salaries  or  emolu- 
ments, they  receive  as  such  officers,  but,  of  course, 
only  as  to  them,  also  be  exempted  from  this  tax,  in 
order  that  these  their  salaries  or  emoluments  might 
prove  real.  A man’s  net  annual  income  consists  of 
what  he  acquires,  in  the  course  of  a year,  by  his  busi- 
ness and  from  other  sources,  inherited  property,  for 
instance,  included,  after  deduction  of  all  his  business 
expenditures  and  of  his  state  and  local  taxes.  Per- 
sonal and  family  expenses  would,  of  course,  belong 
to  and  be  included  in  a net  annual  income,  for  the 
purpose  of  taxation,  and  could  not  be  deducted  from  it. 

The  percentage  for  levying  such  an  income-tax 


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should  be  strictly  uniform  for  every  taxpayer,  in 
other  words,  for  every  dollar  of  income  taxed.  By 
this  proposition  the  following  is  meant.  If,  for  in^ 
stance,  a net  annual  income  of  one  thousand  dollars 
would  pay  a tax  of  fifty  dollars,  a net  annual  income 
of  two  thousand  dollars  should  pay  a tax  of  one  bun 
dred  dollars,  a net  annual  income  of  three  thousand 
dollars  a tax  of  one  hundred  and  fifty  dollars,  a net 
annual  income  of  ten  thousand  dollars  a tax  of  five 
hundred  dollars,  and  so  on.  This  would  be  a simple 
income-tax,  increasing  in  the  natural  order  of  num- 
bers and  taxing  every  dollar  of  net  taxable  incomes, 
high  or  low,  alike.  Thus,  every  dollar  of  the  four 
incomes  named  would  pay  a tax  of  five  cents  and 
neither  more  nor  less.  This  would  be  the  only  just 
kind  of  an  income-tax,  under  the  American  principle 
of  equal  rights  to  all,  before  the  law.  A man  with  a 
larger  net  annual  income  plainly  claims  and  enjoys 
for  it  the  protection  of  the  national  government, 
for  which  in  troth  ail  national  taxes  are  paid,  to  a 
larger  extent,  than  a man  with  a smaller  net  annual 
income.  For  this  reason,  if  the  two  incomes  be  taxa- 
ble, the  former  should  surely  pay  more  tax^  than  the 
latter,  but  on  a strictly  and  absolutely  equal  basis, 
every  dollar  of  both  incomes  paying  exactly  the  same 
amount  of  tax,  or  the  same  rate. 

A so-called  graduated  income-tax,  increasing  in 
any  other  way,  than  in  the  natural  order  of  numbers, 
and  according  to  which  the  dollar  of  net  taxable  in- 
comes of  different  amounts  would  be  differently  taxed, 
that  is,  the  dollar  of  larger  net  taxable  incomes  grad- 
ually higher,  than  the  dollar  of  smaller  net  taxable 
incomes,  would  be  a violation  of  the  American  prin- 
ciple referred  to  and  wrong  and  unjust.  It  would 
rob  the  few  for  the  benefit  of  the  many.  It,  only  in- 
versely, would  do  the  same  thing,  the  protective  tariff 
of  this  country  is  plainly  doing  now,  that  robs  the 
many  for  the  benefit  of  the  few.  It  would,  so  to  say, 
punish  men  for  being  wealthy,  which  would  be  the 


6 

most  senseless  thing  in  the  world.  There  are,  it  is 
true,  men  with  colossal  fortunes  in  this  country.  Yet, 
for  this  fact  not  those  men,  owning  their  riches  legit- 
imately, are  responsible  or  to  be  blamed,  but  the  er- 
roneous political  economy  of  this  country  urgently 
requiring  a change.  By  a graduated  income-tax, 
wiibout  a manifest  wrong,  the  great  riches  in  the 
hands  of  individual  citizens  of  the  United  States 
could  not  be  taken  away  from  them.  On  the  other 
hand,  a simple,  not  graduated  income-tax  would  have 
the  effect,  that  the  richest  men  of  this  country,  the 
railroad  magnates,  the  wealthy  owners  of  mines  of 
every  kind,  the  proprietors  of  extensive  real  estate  in 
the  large  cities,  the  great  manufacturers  and  other 
opulent  persons,  would  in  a direct  manner  have  to 
contribute  annually  certain,  by  no  means  trifling 
shares  of  their  net  incomes,  for  the  support  of  the 
national  government,  which  is  not  the  case  now,  with 
the  exception  of  those  paying  internal-revenue  taxes. 

For  the  collection  of  the  income-tax,  proposed  to 
become  the  sole  national  tax  of  this  country,  the  fol- 
lowing course  may  be  suggested.  Every  net  annual 
income  of  tbe  head  of  a family  or  of  any  other  per- 
son, having  such  an  income  of  his  own,  in  order  to  be 
flxed  and  ascertained,  under  this  system  of  taxation, 
should,  by  the  person  receiving  the  income,  be  sworn 
to  in  a lump,  not  in  detail,  and  not  be  proved  other- 
wise, except  the  person  be  charged  with  having  com- 
mitted perjury  in  this  respect.  Every  income  to  be 
sworn  to  would  always  be  that  of  the  last  calendar 
year.  If  the  person  referred  to  be  a minor  or  other- 
wise legally  incapacitated,  to  do  this  himself,  the  oath 
would  have  to  be  taken  and  the  income-tax  to  be  paid 
for  him  by  bis  guardian.  Tbe  < fficial  lists  of  tbe  net 
annual  incomes  sworn  to  should  be  accessible  for  in- 
spection to  every  one,  having  a net  taxable  income 
and  whose  own  name  would  be  on  the  lists.  Perjury 
committed  with  regard  to  an  income  sworn  to,  should, 
after  conviction  of  the  defendant,  be  punished  as  in 


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other  cases.  Governmeot  officers,  appoiiited  for  this 
purpose  throughout  the  Uniou,  by  states,  territories, 
and  districts,  perhaps  best  by  congressional  districts, 
should  annually,  during  a certain  period  of  the  year, 
in  the  manner  stated,  by  administering  the  neceaeary 
oaths,  ascertain  the  amounts  of  all  the  net  taxable 
incomes  within  their  respective  districts,  enter  these 
incomes,  together  with  the  names  of  the  recipients, 
into  officii!  lists  and  send  copies  of  these  lists,  con- 
tainiuK  the  several  net  taxable  incomes  and  their 
sum  total,  to  the  Secretaiy  of  the  Treasury.  All  this 
should  be  done  up  to  a cer  tain  date. 

After  the  Congress  of  the  United  States  would 
have  annually  made  all  the  appropriations  neces- 
sary for  the  expenditures  of  the  national  govern- 
ment of  this  country,  during  the  succeeding  fiscal 
year,  from  July  1st  of  the  current  to  June  30,  inclu- 
sive, of  the  next  calendar  year,  it  should  be  ihe  legal 
duty  of  the  Secretary  of  the  Treasury  to  ascertain 
the  sum  total  of  the  appropriations  stated.  By  this 
sum  he  should  divide,  the  total  amount  of  all  the  net 
taxable  incomes,  throughout  the  Union,  reported  to 
him,  as  stated  before,  in  order  to  ascertain  their  per- 
centage required  as  income-tax,  fjr  defraying  the' 
expenditures  |of  the  national  governmer.t  of  this 
country,  during  the  fortbcoming  fiscal  }ear.  This 
percentage,  together  with  a statement  of  the  sum  to- 
tal of  all  net  taxable  incomes,  throughout  the  Union, 
reported  to  him,  should  be  transmitted  by  him  to 
Congress,  whereupon  the  laUer,  by  an  act,  would 
have  finally  to  fix  the  income  tax,--a8  j^uniform  per- 
centage of  every  net  taxable  income,  rep<‘rted 
throughout  the  land, — tf*be  levied  during  the  forth- 
coming fiscal  year.  Fo^  the  greater  safety  of  the 
government,  as  to  the  funds  necessary  for  its  expen- 
ditures, the  percentage  stated  might  be  annually 
fixed,  by  Congress,  slifelitly  higher,  than  it  would  be 
necessary  according  to  a strict  arithmetical  calcula- 
tion. The  percentage,  for  levying  the  income-tax. 


8 

having  been  fixed  by  law,  this  tax  should  be  collected 
by  another  class  of  governtnent  f flScers,  appointed  for 
this  purpose  throughout  the  Union,  by  states,  terri- 
tories, and  districts,  perhaps  also  best  by  Congres- 
sional districts.  The  tax  should  be  collected  by  them, 
wife  n their  respective  districts,  during  a certain 
time  of  the  year  and  promptly  be  paid  by  them  into 
the  United  States  Treasury. 

The  adoption  of  the  income-tax  suggested  for 
this  country  would,  of  course,  necessitate  the  appoint- 
ment of  a large  number  of  new  revenue  officers  of 
the  national  government.  Yet,  by  the  abolition  of 
the  custom-houses  and  internal  revenue  offices,  an 
equally  large,  if  not  a larger  number  of  the  present 
revenue  officers  of  the  national  government  of  the 
United  States  wojbld  become  superfluous,  their  servi- 
ces coming  to  an  end.  According  to  the  last  annual 
report  of  the  Register  of  the  United  States  Treasury, 
the  total  number  of  ^e^rsons  employed  in  the  customs 
servic^^  of  this  country,  during  the  fiscal  year  ending 
June  30  189^,  was  6,039;  and,  according  to  the  last 
annual  report  of  the  United  States  Commissioner  of 
Internal  R^^venue,  the  total  number  of  persons  em- 
ployed for  the  collection  of  such  revenue  in  this 
country,  during  the  fiscal  year  stated,  was  8,730,  irre- 
spective of  409^  persens  em played,  for  a short  period, 
wHb  regard  to  the  payment  of  the'sngar  bounty. 

The  system  of  a single  and  uniform  national  tix, 
in  the  shape  of  an  income-tax,  for  tte  Union,  would, 
with  the  exception  of  one  poir^t,  not  present  any  real 
or  essential  difficulties.  Thie  point  is  the 'fact,  that 
pv^ry  Congress  of  the  United  States,  constitutionally 
lasting  two  years,  consists  of  two  regular  sessions,  a 
long  one,  beginning  on  the  first  Monday  in  December 
of  the  firot  year,  and  a short  one,  beginning  on  the 
first  Monday  in  December  of  tbe  second  year.  The 
former  session  has  no  fixed  limit  and  regularly  ex- 
tends beyond  the  30th  day  of  June,  the  end  of  the  re- 
spective fiscal  year,  while  the  latter  always  comes  to 


9 

an  end  on  the  4th  day  of  March,  on  which  day  every 
other  year  the  term  of  Congress  and  every  fourth 
year  the  term  of  the  Presidency  and  Vice-Presidency 
of  the  United  States  expires.  The  short  session 
would  cause  difficulties,  every  other  year,  as  to  the 
period  required  for  ascertaining  all  net  taxable  in- 
comes throughout  the  Union  and  for  fixing  the  per- 
centage as  to  the  income-tax,  because  these  matteis 
could  not  be  accomplished,  in  the  manner  suggested 
before,  from  the  l«t  dav  of  January  to  the  4th  day  of 
March,  as  it  would  b^com^  necessary.  This  incon- 
venience, however,  could  be  removed,  if,  by  an 
amendment  to  the  Constitution  of  the  United  States, 
both  the  term  of  Congress  and  that  of  the  Presidency 
and  Vice-Presidency  of  the  United  States  would 
come  to  an  end  and  respectively  commence,  at  noon, 
on  the  first  day  of  July,  the  first  day  of  the  fiscal 
year  of  this  country,  instead  of  at  noon,  on  the  fourth 
day  of  March.  This  would  doubtless  be  a logical 
and  in  many  respects  a practical  amendment  of  the 
fundamental  law  named.  After  the  adoption  of  such 
a Constitutional  amendment,  the  revenue  officers 
mention^^d  before,  ascertaining  the  net  taxable  in- 
comes throughout  the  Union,  should  annually  do 
this,  within  their  respective  districts,  from  the  1st 
day  of  January  to  the  31st  day  of  May  and  report,  as 
stated  before,  the  net  taxable  incomes  ascertained  by 
them  to  the  Secretary  of  the  Treasury  on,  or  if  pos- 
sible, before  the  day  last-named.  Furthermore,  they 
should  provide  the  revenue  officers  of  their  respective 
districts,  collecting  the  income  tax,  with  the  neces- 
sary lists,  copies  of  their  own  official  lists,  containing 
both  the  names  of  the  persons  having  net  taxable  in- 
comes and  the  amount  of  every  such  income  sworn 
to.  This  should  be  done  by  them  by  June  30tb.  If 
Congress,  as  it  should  always  do,  would  timely  make 
its  annual  appropriations  for  the  ensuing  fiscal  year, 
the  percentage  of  all  net  taxable  incomes,  throughout 
the  Union,  for  levying  the  income-tax,  could  be  as- 


f 


¥ 


10 

rtained  by  the  Secretary  of  the  Treasury  and  there- 
^OD  be  fixed,  by  the  necessary  act  of  Congress,  by 
ie  30th  day  of  June,  the  close  of  the  fiscal  year.  Of 
is  fixed  legal  percentage  the  revenue  officers,  col- 
lecting the  income-tax  throughout  the  Union,  should 
informed  at  cnee  by  the  Secretary  of  the  Treasury, 
ereupon  they  should  collect  the  tax,  within  their 
spective  districts,  for  the  new  fiscal  year,  during 
e time  from  July  Ist  to  December  Slst. 

'J  Surplus  amounts  of  the  income  tax  collected 
during  the  preceding  fiscal  year  and  receipts  of  the 
United  States  Treasury,  during  the  same  period,  de- 
rived from  special  sources  of  revenue,  for  instance, 
from  sales  of  public  lands,  would  have  to  be  annually 
deducted  by  the  Secretary  of  the  Treasury  from  the 
sum  total  of  the  income-tax  required  for  the  expen- 
ditures of  the  national  government  of  this  country, 
during  the  subsequent  fiscal  year 

In  order  that  the  United  States  Treasury  might 
not  be  embarrassed  in  its  operations,  for  want  of 
funds,  caused  by  the  non-payment  of  the  income-tax, 
Congress  would  have  to  enact  the  strictest  provisions 
jn  this  respect  Any  person  omitting,  at  the  time 
fixed  by  law,  either  to  state  his  income  under  oath  or 
affirmation,  or  to  pay  his  income-tax,  should  by  a fine 
be  compelled  to  do  so  subsequently.  Any  person, 
however,  r<=^fu8ing  altogethe.r  to  state  his  income  un- 
der oath  or  affirmation,  or  to  pay  his  income-tax, 
should  by  imprisonment  be  c(  mpelled  to  do  so.  The 
foregoing  mode  suggested  of  collecting  a national  in- 
come-tax in  this  country  would,  of  course,  be  greatly 
improved,  in  the  couiseof  time,  by  the  American 
people,  if  such  an  income-tax  would  be  adopted  by 
them  as  their  sole  national  tax. 

The  abolition  of  the  customs  system,  by  the 
adoption  of  a national  income-tax,  in  the  manner  sta- 
ted, might  perhaps  not  be  welcome  to  the  proprietors 
of  overgrown  manufacturing  establishments  in  this 
country,  controlling  now  thousands  of  workmen  or 


perhaps,  to  a certain  extent,  on  a/ co  operative  basi 
in  different  parts  of  the  Union,  wliich  fact  would  be 
blessing  to  a great  many  men  irf  this  country.  C 
operation  means  a perfect  union  of  capital  and  labc 
and  strictly  excludes  all  enmity  between  themo 
the  over-grown  establishments  referred  to  chiefly  ov 
their  capital  or  financial  strength  to  the  protectii 
tariff  of  this  counfry,  that,  as  shown  before,  is  wion 
their  pr  prietors  cannot  just’ 
complain  of  the  abolition  of  the  customs  8yste)iU5^t  . 
give  way  to  absolute  free-trade  in  the  United  State 
In  this/re^  country,  the  commercial  intercourse  wii  \ 
foreign  countries  should,  as  a matter  of  course,  f 
also  strictly  free. 

There  are  those,  who  say  that  a national  inco3a> 
tax,  to  be  collected  as  stated,  would  doubtless  caut 
a ^reat  deal  of  perjury  in  this  country.  Yet  it  is  u 
American  tax,  which  if  permanently  established  ^ 
the  sole  national  tax  of  this  country,  would^6oon 
d^r  the  American  people  truthful  as  to  its  paymer 
•The  truthfulness  of  this  free  nation,  as  to  payin 
taxes,  can  be  injuriously  affected.only  by  erroneov 
taxation,  but  never  by  a just,  sound,  and  uniform  t8. 
for  the  support  of  a governmenf  oi  the  people,  by  li 
people  and  for  the  people,  as  the  government  of  tb 
United  States  is  this.  The  American  people  woai 
doubtless  willingly  uphold  their  national  governme/ 
by  paying  the  most  correct  and  natural  tax  imaginf 
ble,  the  income-tax  suggested  In  doing  this,  the, 
would  surely  obserye  what  George  Washington,  i 
his  farewell  address,  says:  “I  hold  the  maxim  n 
less  applicable  to  public  than  to  private  affairs,  thf 
honesty  is  always  the  best  policy.” 

Indianapolis,  Ind.,  Sept.  1,  *95. 


